September 30, 2023

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Iran, Indonesia discuss forming fund for barter trade

TEHRAN – In a meeting between board members of the Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) and Iran’s new Ambassador to Jakarta Mohammad Boroujerdi the two sides discussed ways of increasing the level of trade between the two countries.

During the meeting, the ICCIMA proposed establishing a joint fund for facilitating barter trade between the private sectors of the two countries, the ICCIMA portal reported.

Speaking at the meeting, ICCIMA Head Hossein Selahvarzi stated that the development of trade and economic relations with other countries is one of the main priorities of the ICCIMA, saying: “We must accept the sanctions and restrictions and formulate strategic plans for trade with Indonesia in cooperation with the country’s embassy.”

He announced sending a business delegation to Indonesia by the Iran Chamber in cooperation with the Trade Promotion Organization (TPO) and added: “One of the strategies of the ICCIMA is to support small and medium-sized enterprises and send and receive business delegations and attend exhibitions.”

Further in the meeting, Boroujerdi proposed establishing an Iranian trade center or permanent exhibition in Jakarta to facilitate trade between the private sectors of the two countries.

Stating that Indonesia is the economic hub of East Asia, the envoy said: “Indonesia has a market of 300 million and is a member of the Association of Southeast Asian Nations (ASEAN) and can be the gateway for Iran’s strong presence in this region.”

Referring to the targeting of $20 billion trade with Indonesia, Boroujerdi said: “To reach this target, we need the cooperation of the private sector and ICCIMA with the Iranian Embassy in Indonesia.”

Welcoming the proposal to set up a permanent exhibition of Iranian products in Indonesia, Selahvarzi said: “This requires the development of a mechanism and long-term evaluation by the related institutions and the necessary arrangements should be made by these institutions.”

Sending a congratulatory message to Selahvarzi on his election as the new head of the ICCIMA, Indonesian Ambassador to Tehran Ronny Prasetyo Yuliantoro expressed his country’s readiness to strengthen economic ties with Iran.

“I am confident that your experiences in this important position will be a valuable asset to achieve the goals and aspirations of your government and will help to develop cooperation with friendly countries,” Yuliantoro said in his message in late July.

During a meeting with Mehdi Zeyghami, the acting head of Iran’s Trade Promotion Organization (TPO), at the place of the organization in early July, the envoy had said that a preferential trade agreement (PTA) is important for the development of trade between Iran and Indonesia.

He said that his country is examining the package proposed by Iran, and expressed hope that the PTA between the two countries will be finalized soon, because this agreement is of particular importance for the parties’ access to each other’s markets.

In this meeting, the ambassador of Indonesia invited Iranian businessmen to attend international exhibitions of this country and said: “The largest trade exhibition in Indonesia will be held in October and we are ready to welcome Iranian businessmen as participants and visitors.”

The TPO acting head, for his part, welcomed this issue and referred to the dispatch and reception of trade delegations and active presence in the exhibitions of the target countries as priorities of this organization.

Referring to the extensive relations between Iran and Indonesia from the past to the present, Zeyghami pointed to the issue of barter trade agreement between the two countries and said this agreement can develop trade between the two sides.

The value of trade between Iran and Indonesia reached nearly one billion dollars in the past Iranian calendar year 1401 (ended on March 20).

Of the mentioned figure, $847 million was the share of Iran’s export to Indonesia, and $119 million was the share of Indonesia’s export to Iran.

Indonesia is one of the world’s consumption markets, and this country’s market is the main destination of many countries’ export goods. Considering Indonesia’s membership in the World Trade Organization (WTO) and low tariffs for imports to this country, Iran can also take advantage of the economic status of Indonesia and expand its trade with this country.

In recent years, Iran has started to sign preferential trade agreements with other countries to expand its economic relations through the reduction of tariff rates. A clear example of this policy is the trade agreement with the Eurasian Economic Union (EAEU) and Pakistan, based on them zero tariffs are to be applied on at least 100 items.

Iran also signed a PTA with Indonesia on May 23 during the trip of President Ebrahim Raisi to Jakarta.

During this trip, the two sides inked 11 agreements on cooperation in different areas, including oil and gas, in the presence of the two countries’ presidents.

In a joint press conference with Indonesian President Joko Widodo on May 23, President Raisi said that Iran and Indonesia have various fields and capacities to improve the level of relations, emphasizing that the signing of numerous cooperation agreements in various fields shows the determination of the two countries to develop relations in all fields.

Referring to the goal set to increase the value of trade between the two countries to $20 billion, the president said, “Of course, the two countries have decided to conduct their exchanges with national currencies.”

Also, before his trip to Indonesia, Iranian Minister of Communications and Information Technology Issa Zarepour, who is the Iranian chairman of Iran-Indonesia Joint Economic Committee, held a meeting with some Indonesian traders and businessmen in Tehran, after which, the minister said that the Indonesian traders are very willing to expand ties with Iran.

By removing the obstacles, the commercial exchanges between Iran and Indonesia can be multiplied quickly, the minister noted.

Zarepour also met Indonesian Trade Minister Zulkifli Hasan prior to the trip of President Raisi to Indonesia in order to finalize the documents of expanding trade between the two countries.

The data of the last decade of Iran’s trade with Indonesia show that the peak of Iran’s trade relations with this country was in the Iranian calendar year 1400 (ended on March 20, 2022), which can be a turning point in history of trade between the two countries.

Iran’s 10-year exports to Indonesia show that in 1400, the highest value of exports to Indonesia occurred in the last ten years, which was $1.081 billion.

Iran’s export to Indonesia in the last ten years shows an upward trend, as the exports to this country have increased from 60 million dollars in 1392 to more than one billion dollars in 1400. This is a sign of the potential of relations between the two countries in the economic area.

Indonesian ambassador to Tehran has said that Iran can use Indonesia as a hub for marketing its products in the ASEAN countries.

The envoy made the remarks in an interview conducted by the Tehran Times on the sidelines of a ceremony to celebrate ASEAN Day 2022 in Tehran in last August.

“I think we [ASEAN member states and Iran] have some great potential that can be developed, for instance now with regard to the health field we can have some kind of cooperation, you know this is a time that we can increase cooperation in the health sector”, he stated.

“So, this is a good time and then I believe that there is some potential that can be still developed between ASEAN countries and Iran”, the ambassador reiterated.

It should be also mentioned that the membership of Iran and Indonesia in important regional and international agreements and alliances such as the World Trade Organization (WTO), the Non-Aligned Movement (NAM), Organization of Islamic Cooperation (OIC), and the D-8 Organization for Economic Cooperation, known as Developing-8, can be a platform to increase bilateral and multilateral cooperation.

Given such capacities and platforms, Iran and Indonesia are determined to deepen cooperation in various fields, including commercial and economic areas.


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